In the race for becoming the next superpower, India has been proactive in redefining the way ahead – particularly in the financial services sector. For over 200 years, India has been building a formal banking system to cater to dynamic needs of people. However, the hard fact is that the unbanked (or under-banked) populations still remain high in numbers.
In an effort to entice more people, India has already started embracing digital wallets, mobile banking applications, Aadhaar Enabled Payment Systems (AEPS) and more. On the other hand, there stands a regulatory vacuum that restricts adoption of futuristic financial tools like the cryptocurrencies. FinTechs are flourishing as they work on an idea of innovating financial services by bridging the possible gaps, providing greater convenience at a lower cost.
The FinTech sector was a topic of discussion in Union budget 2017, highlighting its significance and probable regulations that may be underlined in the times to come. This has resulted in a lot of investments being made in this sector. Today, India is listed as a nation with highest expected ROI of 29% on FinTechs. Check out these stats…
In a country like India, FinTech revolution is growing rapidly considering the increasing fondness of start-up culture, rising digital payments systems, expanding mobile reach, soaring demands of banking with ease etc.
FinTechs have reformed several financial sectors through digital lending, online payment methods, blockchain etc. Here’s a list of the extensive capabilities of FinTechs.
1. Offer better customer satisfaction
FinTechs have helped digitise banking by automating and innovating processes that reduce human intervention, queues, restrictions of time/place etc. They offer convenience to people and gives them the liberty to bank anytime, anywhere. This empowers them to choose the preferred mode and make informed decisions.
2. Deliver data-driven insights and solutions
Unlike the traditional banking systems, collecting and storing customer data has become easier, accurate and error-free. This enables financial institutions to serve customers with personalised products/services while understanding their financial behaviour, repayment capacity (in case of loans and advances) etc.
3. Ensure cost-effectiveness
The solutions offered by FinTechs save costs both for customers and bank branches. The costs of banking at a physical branch i.e. via the traditional approach is at least 10 times more than that incurred at an ATM and 50 times more when transacted on a mobile banking application.
4. Risk management and compliance
For the obvious reasons, financial services must be strictly regulated and so numerous guidelines have been defined by the regulatory bodies. With new technologies being introduced, these regulations are continually broadening. FinTech solutions are in-built with automation that help financial service providers to stay compliant with the changing dynamics and reduce risks such as frauds.
5. Greater access to banking and financial facilities
With FinTechs innovating how customers are served, users are provided with an array of choices to enhance their interactions with the financial institutions. FinTechs have also enabled them to access their finances across all geographies, time zones and more through smartphones, 4G/Wi-Fi networks and other such modern technologies.